SWOT analysis of Vadilal Ice-cream

Vadilal Icecreams is India’s second biggest ice cream company headquartered in Gujarat, India. In addition to ice creams, Vadilal also makes processed and semi-processed food. The company started off with humble beginnings through a soda fountain outlet headquartered in Ahmedabad in 1926.

Today Vadilal Icecreams has evolved into one of the biggest players with more than 50 flavors sold in more than 250 packs and forms like Frozen Desserts, Premium & Super Premium Ice Creams. These flavors are sold in a wide range of packagings such as Cups, Cones, Candies, Juices, Family packs and Economy Packs. The company has always developed and delivered products of consistent quality and has been associated with Indian sentiments thereby making it popular in the country.

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Strengths in the SWOT analysis of Vadilal Ice-cream

The following are the strengths of Vadilal Ice Creams :

Clear Differentiation: Quite unlike competitors who claim to sell icecreams but are actually selling frozen desserts, Vadilal openly acknowledges that they sell frozen desserts and that their ice creams contain vegetable oil which is what makes the two different according to specifications of the Food Safety and Standards Authority of India made mandatory in 2011.
Fighter attitude: From the day it was established in 1929 to today the survival has not been easy for Vadilal since it had to fight against string rivals like HUL, AMUL, Mother Dairy etc. However, though the rivals have changed Vadilal has continued the same approach of approaching them in a systematic way and using transparency and ethics for survival.
Operational Streamlining: Vadilal Icecream was fast losing its sheen in the early nineties when the company decided to ramp up the operational efficiencies. The company restructured their product portfolio, cut down volumes and economized the packaging while ensuring that quality remained consistent.
Promotional Schemes: Vadilal Icecreams regained their lost glory through the Buy 1 Get one free scheme that was launched which helped them get the necessary margins by looking at volumes of sales. This move also helped them gain the attention of customers who had got distracted by other brands.
Diversification: The company diversified into processed and semi-processed food like frozen vegetables and fruits, and frozen food like parathas and dairy products. The company also moved out of the nation branded commodity segment which was highly priced sensitive and was eating into the overall profitability of the business.

Weaknesses in the SWOT analysis of Vadilal Ice-cream

Some of the key weaknesses of Vadilal are :

Distribution Challenges: The biggest challenge for Vadilal Icecreams was the distribution. The intermittent power failures at the outlets, the high cost of using freezer vehicles for transportation and inability to cover the geographic spread that MNC rivals like HUL had were all critical challenges in distribution that the company continues to face.
Seasonal Demand: Ice creams are seasonal products and consumption increases more during summer months while reduced significantly during winter.Vadilal which is primarily into icecreams finds it difficult to manage the seasonal changes in demand.
Packaging: Products like ice creams, frozen vegetables etc which are what constitutes the major portfolio of Vadilal Group are all perishable in nature and a lot of care and research has to be done on the packaging that can increase their shelf life. There is also a risk of melting and damage when in transit as well as if power fails at the location of storage. All this makes packaging a costly as well as the critical aspect of the quality in the case of Vadilal products.
Predatory pricing: Companies like HUL and Amul who are the arch rivals of Vadilal had drastically reduced the prices for their ice creams and the company struggled to match the prices that had hit rock bottom. This was a huge challenge for Vadilal Icecreams.

Opportunities in the SWOT analysis of Vadilal Ice-cream

Some of the opportunities include :

The high market potential for ice creams in India: The dairy market alone in India is around 80 billion INR which is one of the largest in the world. Though ice creams constitute only 9 billion INR in the dairy products segment, the same is expected to grow at a rate of 16 % per annum in the next ten years.
The favorable legislative framework in India: The government is currently offering a lot of schemes to companies which manufacture products in India. In addition to this, there are also a lot of schemes and incentives for companies in the agriculture, dairy, and food processing business.